NEW DELHI: Global payments firms including Visa, MasterCard and PayPal are expected to meet finance minister Arun Jaitley on Friday, seeking more time to comply with the norms laid down by the banking regulator, according to four executives from payments companies aware of the development. The companies are also seeking a relaxation in the Reserve Bank order that mandates storage of data within the country.
The companies are also seeking a relaxation in the Reserve Bank order that mandates storage of data within the country. The last-minute push to seek help from the government comes even as global payments firms have failed to convince RBI to defer the October 15 deadline to store data of Indian consumers exclusively within the country.
Following the order in April, several payments companies had sought permission to store a copy of the data locally with another set stored in international servers, termed as ‘data mirroring’. “Our key asks from FM Jaitley at the meeting will be knowing what the government stance will be and probably letting them know how difficult it is to implement the order,” an executive of a payments company said.
“We expected RBI to be more consultative. They have always been very consultative. They promised they will issue aset of guidelines (FAQs) for the industry, which has also not come.” There is a sense of panic among companies over the looming deadline as they are not operationally ready to comply with the order. The absence of communication and clarification from the banking regulator has only added to their worries.
“The situation is not clear, with RBI maintaining a stoic silence over the issue. We are getting some feelers from the government that they could come to the other solution — data mirroring. But RBI is quite rigid,” said an executive with a payments company, who did not want to be named.
RBI did not reply to queries from ET.
The delegation will include industry associations such as the US-India Strategic Partnership Forum (USISPF). Representatives of companies such as Google, Facebook and Amazon are also expected to join the delegation, said the four company executives cited above. PayPal declined to comment on regulatory matters. Amazon said it would comply with local laws but did not reply to a query on whether it would be a part of the delegation that would meet Jaitley.
“Compliance with local laws and regulation is a top priority for us in all the countries we operate in. We continue to work with the industry to ensure the stability and growth of the digital payments ecosystem,” a representative for Amazon said.
Google, MasterCard and Facebook did not respond to queries seeking comments. Company executives are of the view that if data mirroring is allowed, they would need extension till at least December to be compliant. Setting up owned data centres within India would take 18-24 months, they said.
In April, RBI set a six-month deadline for banks and payments firms to house the entire transaction data of Indian consumers within the country.
‘SECOND WAVE OF DEMONETISATION’
“If the deadline is not extended, companies may be asked to switch off. It may be like a second wave of demonetisation for payments companies, especially big ones like Visa and MasterCard,” said another official of a payments company.
“They can’t, after all, overnight stop 900 million cards in the country from functioning,” said a third official, adding that the industry is hopeful of a last-minute respite from RBI. At present, India does not have a robust data privacy law.
The government is seeking public inputs on a draft data protection Bill, submitted by the Justice Srikrishna committee, which proposes that Internet and payments companies store a copy of all personal data of Indian users locally.
It has also recommended that critical personal data — to be defined by the government — be stored only in India, a provision that has sparked concern among global firms. The RBI directive came before the recommendations by the Justice Srikrishna committee, and payments industry officials say there could be chaos if the banking regulator does not relax its stand.
“We are hoping that after tomorrow’s (Friday) meeting, the government will step in so that RBI allows data mirroring with some deadline extension. Even the Srikrishna committee has allowed for mirroring,” said another official with a payments firm.
Source : PTI